As the largest raw material producer in the paper package industry, Latin America plays a very important role. Based on the situation in Latin America this year, what points should we pay attention to when purchasing?
-Rapidly rising of pulp prices
Affected by the continuous impact of the global supply chain and logistics restrictions under the epidemic, the price of pulp has been rising. Brazil’s largest pulp supplier has another round of price increases in the Chinese and US markets in June. However, as countries pay more and more attention to environmental protection issues, it is a trend to replace plastics with paper. Although the price of pulp is rising, the cost is still lower than other packaging, and it is more environmentally friendly.
-Inflation
At present, various countries in Latin America are also facing a situation of continuous rising inflation, while rising energy and fuel prices have reduced people’s purchasing power, and Brazil’s current unemployment rate is as high as 14%. Economic trauma has led to shortages in supply chains. The price of raw materials for paper packaging has risen.
-Supply and demand
According to the Brazilian Association of the Tree Industry (IBÁ), cardboard consumption increased by 8.1% in 2020 and another 9.4% in 2021. Even after the lockdown, cardboard demand was driven by alternative plastic packaging and the rise of e-commerce, In just the first quarter of 2022, Brazil exported 60,000 tonnes of Kraft liner to Latin America, compared with 176,000 tonnes in the entire year of 2021.Therefore, the demand for paper packaging is still rising in the future, and major merchants can also consider whether to use paper to replace the packaging of their products.
-Increase of supplier
At present, several major paper suppliers in Brazil are increasing their production capacity, and factories in China and Vietnam are also smelling the future market for paper packages, and they have also done the same after the epidemic has stabilized. When the future reaches a certain level, after supply and demand are balanced, the price will drop.
